The burger giant Red Robin is laying off thousands of employees as a direct result of rising minimum wages across the country.
The restaurant said they hope to save about $8 million this year by getting rid of all the busboys at each of their 570 burger joints nationwide.
Most of their stores are in the West, where states and cities have led the way by mandating skyrocketing minimum wages. The mandated minimum wage in some areas in California and Washington is above $15 per hour.
The chain – based in Colorado – has already eliminated “expediters,” the employees who plate the food in the kitchen. That resulted in a savings of almost $10 million, the New York Post reports.
“We need to do that to address the labor increases we’ve seen,” Red Robin’s chief financial officer Guy Constant told attendees at the ICR retail conference held in New York City.
The biggest problem they face, they said, is that it cuts into customer service, which directly affects the customer experience.
On January 1, the minimum wage increased at hundreds of places across the country. The highest minimum wage in the country is in SeaTac, Washington, the home of Seattle’s airport, where the minimum wage will jump to a staggering $15.64 per hour.
In New York State, it will jump for fast food workers outside New York City from $10.75 to $11.75, eventually going to $15 in 2021.
In Cupertino, California, the rate will be $13.50 per hour. That’s the same rate in Los Altos, San Mateo, Palo Alto, and San Jose, and a dime less than workers will make in El Cerrito.
Democrats famously champion a nationwide $15 per hour minimum wage, but – hypocrites that they are – they don’t pay their own employees nearly that much.
In a class-action lawsuit filed by 40 field workers against the Democratic National Committee, they allege they were not fairly compensated for the work they did during the 2016 campaign. They said they were paid $3,000 per month while being forced to work 80 to 90 hours per week (that’s less than $10 per hour). It’s “obscene,” the workers’ attorney Justin Swindler said.
“These workers were out there in a campaign that was promising $15 an hour minimum wage, and expanding the overtime rights of workers,” Swidler said.
In Missouri, when the St. Louis City Council approved a $10 minimum wage, the Republican-controlled State Legislature slapped them down.
St. Louis originally passed a minimum wage hike two years ago, prompting business groups to sue to stop it in court. The Missouri Supreme Court recently ruled that the St. Louis measure was lawful, but the new state preemption law renders it irrelevant.
Gov. Eric Grietens said he supports a “fair wage,” but that $10 per hour is just impractical.
“Our state needs more private sector paychecks and bigger private sector paychecks,” Greitens said in a statement. “Politicians in St. Louis passed a bill that fails on both counts: it will kill jobs, and despite what you hear from liberals, it will take money out of people’s pockets.”
What do you think about this?
Is increasing the minimum wage a sure-fire way to entice companies to eliminate or reduce thousands of lower paying jobs?
Should the free market alone be allowed to set wages, or is some government intervention needed?
Sound off and let us know your thoughts in the comment section below.